Mortgage Credit Availability Dipped in February

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Mortgage credit availability decreased in February, falling 0.3% compared with January to a score of 181.3 on the the Mortgage Bankers Association (MBA) Mortgage Credit Availability Index (MCAI).

Credit availability for conventional loans decreased 1.2% while credit availability for government loans increased by 0.7%, compared with the previous month. 

Credit availability for jumbo loans decreased by 1.0% while credit availability for conforming loans fell by 1.6%.

A decline in the MCAI indicates that lending standards are tightening, while increases in are indicative of loosening credit.

The index was benchmarked to 100 in March 2012.

“Mortgage credit supply decreased in February, as both conforming and jumbo segments of the market saw a decline,” says Joel Kan, Associate vice president of economic and industry forecasting for the MBA, in a statement. “There were also reductions in ARM program offerings, as well as in low credit score programs offered by investors.

“Last month’s activity was the calm before the storm,” Kan adds. “Mortgage rates dropped steeply in the last week of February and a large surge of refinance activity followed. Investors may adjust their future mortgage credit offerings based on the sudden upswing in demand.”

The MCAI draws on data from Ellie Mae’s AllRegs Market Clarity business information tool. 

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